Hotel Group Sales Blog

Optimizing Groups Sales, Revenue & Cost

The Time has come for Meeting Room Booking Engine on Hotel Websites

What is a meeting booking engine?

A booking engine is software that allows people visiting a hotel’s website to book rooms online without having to contact the hotel over the phone. Regular booking engines enable users to book bedrooms or guest rooms as they are more commonly known in hotelier speak. So, a meeting booking engine allows the visitor to book meetings online on the hotel’s website. These are more powerful engines that encompass rooms, meeting space, Food & Beverage, Audio Visual and other add-ons that are required for a successful meeting.

Who uses meeting booking engine?

Large chains like Hilton and Marriott recognized some time ago that there is a demand for booking meetings online, especially the smaller meetings, and have implement these engines on their website. Other large chains and even smaller chains are either looking into it or are in some stage of implementation.

Why do we need a meeting booking engine?

Hotel Group Sales Challenges

The current state of the meeting industry has created specific challenges to the hotel group sales teams that can be solved to a certain extent using a meeting booking engine. The following infographic depicts the problems and the impacts of those problems to hotel group sales teams.



The proliferation of Requests for Proposal

A survey by Meeting Professionals International, the largest meeting and event industry association worldwide, found that RFPs had increased 300% over the previous 5 years. Does this mean there are 3 times as many meetings? Not really, it just means that meeting organizers are choosing to get more proposals for their events, enabled in part by the advent of websites that send RFPs to multiple venues and help compare results.

Reducing Conversion Rates

While more proposals help organizers make better decisions, it also means that hotel sales teams are sending out a lot more proposals with a lot less chance of winning the bid. In fact, industry figures estimate that the current probability of a proposal converting to actual business is less 5%. Put another way, for every 20 proposals sent out, hotels are happy to even convert one group.

Reducing Quality and Time Spent on Proposals

A typical proposal takes about 30 minutes to complete.  Larger more complicated requests need internal meeting and decisions making and take hours and days to complete, and the sales manager at the hotel is hard pressed for time. As sales people are forced to send more and more proposal, the quality of those proposals have to suffer, and they tend to send more boilerplate proposals in response to RFPs. This means not personalizing the response to the industry or specific customers which reduces conversion. But even worse is when specific questions from organizers are not answered in a rush to send more proposals. This further aggravates the problem of low conversion by reducing the conversion ratio further.

Increasing Response Times

The heavy demand on hotel sales managers also means that some of the proposals end up being delayed or sometimes missed when an RFP has a set due date and time. A Harvard Business Review study found that when customers are 7X more likely to convert when contacted within the first hour of the request. The delayed response reduces conversion even more.

Time Spent on Small Meetings

Industry data indicates that close 80% of the meeting are what are considered smaller meetings that produce a lot less revenue for the hotel. While RFPs for these smaller meetings are easier to respond to and takes lesser time, the competition is still stiff and not sending a good proposal reduces conversion. This leads to sales managers spending a lot of time on small meetings that probably follow the 80-20 rule and only produce about 20% of meeting revenue for a hotel, thus spending less time on larger revenue business.

The Result – Sales Teams that don’t have time to sell

Given all the statistics in the above paragraphs, it’s evident that sales teams have quite a load just responding to incoming proposals that have a low conversion rate and a lot of the time is spent on small meetings that are not high revenue generators. The result is that sales teams spend very little to no time on actual proactive selling that can land hotels large and lucrative clients. In fact, another survey found that hotels sales managers only spend 15% of their time on proactive sales. I’ll let that sink in. Only 15% on proactive sales. Essentially they are doing paperwork 85% of the time.

The Solution – Online Meeting Booking

One obvious solution to the overload is to introduce the ability for customers, especially the ones looking for smaller meetings (remember the 80%?) to booking their meetings online. This brings up many questions around user acceptance and feasibility of meeting booking engines in the minds of many hoteliers we met. Again, we look at data to answer these questions.


User Acceptance

Industry surveys show that 39% of meetings have a lead time of less than 4 weeks. The lesser period of time available to plan the meetings makes it imperative for meeting planners to get quick responses in order to meet their timelines. In fact, an overwhelming 83% thought hotels were too slow and wanted a faster response.

A large number of meeting planners already user e-RFPs and other booking tools for online meetings and are familiar with the online format. 80% of the organizers surveyed said they will be willing to book meetings online if it facilitated their need for a faster response.

It’s evident from data that meeting organizers are not only willing to accept online booking, but demand a faster response, whether online or not. Further, there were about 25% of the respondents who said they don’t consider hotels for small meetings if they don’t have an online solution.

Feasibility

Another concern for hoteliers we hear often is that meetings have many customization and building such an engine will be too complex and unusable. To this objection, we call to your attention portals like Instagathering.com, facilemeeting.com, and meetingbooker.com that have enabled bookings worth several million dollars from organizers in spite of the relatively low investment that has gone into these portals. It’s only a matter of time before a large percentage of meetings are booked online and it’s imperative that hotels implement a meeting booking engine so they are not too late to the game and are ready to take online meeting bookings when they do become the norm

 

GroupRevMax Booking Engine

GroupRevMax has such a booking engine, whose feasibility is proven by many bookings online from its owned portals of Instagathering.com and FacileMeeting.com. To get more information or to book a demo, please click here.


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Time to Demand More From Hotel Sales Technology

The primary technology component in group sales at hotels has been a Sales & Catering system. While these systems served sales teams well in the past, these are just sales tracking systems and it’s time to demand a lot more from technology we use for group business. Following are a few.

Profitability Integrated in Sales Workflow

Group Systems must integrate profit into each step of the group sales process. It should integrate profitability into your lead pipeline and surface best leads, into the pricing process, and into contract and negotiation phases. And it should do all this automatically without any manual intervention at every stage so your speed to market is not impacted.

Holistic View of the Business

While groups use services of various departments, profitability shouldn’t be segmented and must be presented in a holistic manner with all aspects of the business across department boundaries. This will enable sales teams and management to make intelligent decisions like increasing pricing of one component to cover profit degradation in another.

Enable Consistent Control

Technology should allow built-in management control into the sales process as well. Systems must allow management to control the group sales process without producing overload by surfacing sales that are outside of set parameters or business that is not meeting specific goals.

Help Upsell and Cross Sell

Technology should help hotels generate more revenue from group attendees with targeted offers. Systems should have functionality that support up-sell of rooms or cross sell of services like a bar or spa.

Facilitate Continuous Improvement

Technology can aid continuous improvement by surfacing the right analytics about sales, revenue, profit and your customer behavior. Hotels can continuously tweak their sales & revenue strategy based on outcomes that are available immediately instead of taking days and weeks to prepare reports quarterly or annually.

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4 Steps to improve GOPPAR in Group Sales

Hotel Performance measurement has evolved over time and one of the latest measures is GOPPAR( Gross Operating Profit Per Available Room). This is considered a better measure than REVPAR(Revenue Per Available Room) for the hotel's performance as a whole since REVPAR only looks at room revenue and ignores non-room revenue and cost completely. GOPPAR becomes even more relevant for the group segment since hotels have many costs associated with selling and servicing groups and groups have significant spend on non-room aspects like F&B, meeting space rental, audio-visual, etc. each of which have different profitability. 

While many hotels have now started measuring performance by GOPPAR, how do we actually improve it? In the group segment, following are some of the aspects to manage well to improve GOPPAR.

Manage Contracted Non-Room Revenue

Revenue management has become increasingly sophisticated for guest rooms,but many hotels still use the gut-feel technique (well, not really a technique) to manage non-room revenue. This must change and equal responsibility for meeting budget must be assigned to meeting space and catering as revenue and profit generators. More specifically, hotels should define targets  for revenue and profit for conference rooms by seasonality and strive to meet that in every quote. It should also be reviewed often and updated for changing market conditions.

Consider the following from HOTSTAT MENA report. Even though ADR and occupancy fell, and expenses increased, GOPPAR increased due to F&B demand,.
Doha hotels felt the effects of the summer slowdown early as performance levels dropped during May with a 1.3 percentage point reduction in occupancy to 74.9% and a 2.8% fall in ARR to US$210.27. The softer rooms performance saw a 4.4% decline in RevPAR, however stronger food and beverage demand resulted in a 4.9% growth in TRevPAR to US$408.85. Although operating expenses were higher during the month, the increase in overall revenues was sufficient enough to ensure the GOPPAR increase of 1.8% to US$181.52.

This shows how important it is to have a holistic view in order to capitalize on one aspect when another is not doing so well.

Increase Non-Contracted Revenue Per Attendee

Conference attendees have budgets beyond what the conference organizer has contracted. Hotels should aim to get the most from that spending ability by cross selling other services and amenities to group attendees. For example, hotels can offer a discount on their bar or spa to group attendees and attract not just the attendees staying in the hotel but ones staying elsewhere too. Getting these promotions in front of the attendees at the right time can be a challenge, but can be done effectively using the event's mobile app or hotel's own mobile app like the free app provided by GroupRevMax.

Plug Profit Leaks

To win group business, hotels offer a myriad of freebies including upgrades, complimentary rooms, discounted rooms, etc. While these may be necessary to gain the business, it's important to watch what you give away and factor it into the price. Make sure your revenue managers and revenue management systems factor all these into pricing a group. 

Further, all costs associated with group sales and service must be factored into the budget and profitability goals should be assigned with those factored in. Group sales staff salaries, costs of reservation agents entering group reservations into PMS, agents taking calls for group bookings should all be factored in to get the full picture. 

In essence, all group pricing should be done based on not just revenue goals, but also profit goals if you are to really support an increase in GOPPAR.

Aim for Balanced Sales

Revenue managers at hotels with significant meeting space understand that space is more profitable when sold with room component than when it's sold to catering only events. So, in order to achieve maximum profitability, hotels should try to sell these two assets in a balanced way so as to not sell out one and reduce value of the other.

Implementing these can go a long way in optimizing your GOPPAR, but these are tough to include in a sales process without the proper tools. GroupRevMax has revenue management for contracted non-room revenue, a mobile app to cross sell and increase non-contracted revenue, profit goals based pricing, and room to space ratio analysis to support increasing your GOPPAR while improving your speed to market significantly. To schedule and online one-on-one presentation or request a free trial, send us a note by clicking here.
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A Lesson From Retail Industry to Reduce OTA Commissions

Retailers, online or brick and mortar, have used one technique effectively to increase repeat sales that hotels can learn from. The concept is simple - offer incentives or coupons to existing customers for repeat business. Hotels can use the same technique to gain more direct bookings and make OTAs more of a referral partner like online shopping comparison sites.

This might be an over-generalization and there are obviously differences between retail and hotel industry. We look at some of these below.

Rate Parity

Unlike retailers, hotels have a rate parity agreement with OTAs they don't want to violate, but it only covers publicly available rates. Websites like Hotwire offer unpublished rates without making them available online, so a coupon should work the same way and shouldn't be available online and hence doesn't violate parity agreements

Coupon Delivery

An additional complication that hotels have in terms of sending out coupons is to make sure that the coupons cannot be transferred or republished on coupon sites, which then becomes a grey area in terms of it being a publicly available rate. Some delivery options are as follows.

Loyalty Program

One way is to tie the coupon to a loyalty program so you have to sign in to use the coupon. This makes it easy for the customer to use it since it's stored in a convenient location and no code is necessary. 

Mobile App

If you have a mobile app, make sure users register themselves and tie the coupon to that specific instance of the app. The app also makes it easy for the customer to find and use the coupon and can also be built to remind customers of coupon expiry. 

PMS Profile

Another way is to tie it to the PMS profile at booking, so the coupon is only valid for a profile that already existed in the PMS. Hotels will have to add this feature to their booking engine or redirect coupon users to an engine that supports such a check and sits on top of the regular booking engine.

Audience

Retailers send coupons to as many people as they can and don't worry too much about whether the person or someone else used the coupon or if someone published a coupon code online. Hotels, however have to be careful due to rate parity reasons mentioned before. So, how can hotels have go beyond their existing customers and have a broad audience while making sure rate parity clauses are still met? Following are some segments that can be targeted.

Group Attendees

Attendees of events at your hotel is one such segment even if they are not staying at your hotel using other touch points with the hotel. It's possible to physically hand out paper coupons to attendees, but is more likely to be lost. If the group has a mobile app or facility, hotels can partner with the group to push the coupons. For groups that don't have a mobile app, hotels can provide them one by partnering with companies like GroupRevMax Mobile App to provide groups an app they can use for their marketing and hotels can use for coupons as well as future marketing.

Friends and Family

Hotels can also allow people to book for a certain number of their friends and relatives. By limiting the number of people, hotels eliminate the risk of the rate being public, but still broaden the audience by that multiple. 

Conclusion

In conclusion, like referral sites work for online retailers, OTAs should ideally be just a referral site for the first time customer. Once a guest has stayed at your hotel, he/she should have an incentive to book your hotel direct on your website and a coupon gives them just that. They could still compare hotels on OTA sites and you might lose him if your compset is better in spite of the coupon, but if they decide to book your hotel, chances are they will book on your website and use the coupon. It's not as good as a direct reservation generated through reputation and digital marketing, but can be still better than paying OTA commissions.

GroupRevMax allows hotels to convert group attendees to leisure travelers using their mobile app that hotels can provide free to group organizers and can then use as a marketing tool to enhance direct booking and customer loyalty. Click here to learn more.
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Efficiency of your RFP pipeline

Sales Efficiency Series - Efficiency of your RFP pipeline


More than ever before, hotel sales teams are finding themsleves under RFP overload along with increasing demands on speed to market. How can they meet these competing demands? In today’s blog we look at how GroupRevMax eliminates RFP hell in three simple steps

 

Step 1 – Consolidate Leads


GroupRevMax consolidates leads from any lead sites that a hotel signs up for and displays all leads in one place, nicely tabulated with pertinent information like source, due date, dates of stay, rooms requested, etc. It supports independent lead generation sites, brand websites, and convention bureau sites for consolidation, eliminating the need for sales managers or a coordinator to visit multiple websites looking for leads.

Step 2 – Score Leads


Once the leads are consolidate, GroupRevMax scores them relative to each other for best fit and probability of conversion. Following are some of the factors used to determine which groups are best fit for the hotel and which have the highest probability of converting.

 

Best Fit


  1. Profitability
  2. Current group pace on requested dates vs. historic pace
  3. Space to room ratio requested vs. available
  4. Lead Time
  5. Group Size

Conversion Probability


  1. Rate requested vs. hotel’s current group rate
  2. Star rating if requested
  3. Is this a repeat customer?

Step 3 – Assign Leads


Once leads are consolidated and scored, they are assigned to different sales managers based on pre-set criteria like geography, market segment, group size, lead time, etc.


End Result 


These 3 steps help hotels in the following ways

  1. Increase sales efficiency and productivity by eliminating all manual tasks that are not associated with actually responding to an RFP
  2. Increases probability of conversion by responding to the best fit leaf with maximum probability of conversion first and gaining the first response advantage

 

Does your hotel need to streamline RFP management? Click here to request a free trial of GroupRevMax.

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Tiered Group Rates - A win-win for hotels and event planners?

Tiered Group Rates - A win-win for hotels and event planners?

It's the dilemma impacting many organizations in the meetings industry. The planner wants to offer more rooms at an attractive rate for attendees. The hotel wants to wait to see if business and leisure travelers will represent better business.

“Everyone’s trying to drive rate,” Heidi Voorhees, MBA, CAE, Senior Vice President, Housing, Experient, says. “No matter where you turn in the hotel industry, the conversation is all about ADR growth.”

Hotels have plenty of reasons to turn bigger profits, too. A combination of higher transient demand and limited supply growth make the current environment very much a seller’s market. This presents some potential challenges on the planner’s side of the negotiation table.

“A lot of groups are under-blocked,” Voorhees says. “Still, even as group demand increases, it’s been challenging to secure more rooms.”

A Real Solution For Rooms And Rates

The good news? There is a strategy that can satisfy both sides: rate yielding.

“Rate yielding is a tried and true technique,” Voorhees says. “Airlines have been using this model to sell tickets for years.”

In addition to airlines, online travel agents like Priceline and Expedia use the same type of approach to maximize profits and sell more rooms. For group rate yielding, the two parties work together to secure an introductory rate for a pre-determined allotment of rooms. As the registration period continues, the hotel can evaluate their transient demand to determine when to provide more rooms for the group and where to set their rates. The state of the market and historical registration activity help dictate how to set new hotel costs.

“Successful rate yielding relies on understanding the show cycle,” Voorhees says. “You have to take into consideration the typical booking patterns to know how many times and when to adjust the rate.”

However, those rate adjustments should not be an arbitrary amount. As a planner sorts through the details of a hotel contract, yielding must be a big part of the discussion.

“It’s important to start with a low introductory rate, but it’s equally important to negotiate the end game,” Voorhees says. “The client has to know the maximum rate they’re willing to accept. Make sure the language in the contract supports that range.”

Voorhees and Experient have already seen rate yielding’s impact. By using rate yielding at CONEXPO-CON/AGG in Las Vegas, the blocks at 13 MGM properties grew by 15 percent over contracted value at lower-than-market rates.

Appeal To Attendee Buying Behaviors

In addition to keeping planners and hoteliers happy, this strategy can keep smiles on the faces of the most important people: the attendees.

“When you think about the perception of travelers who book through OTAs, they’re used to seeing incremental increases in prices online as they approach their travel dates,” Rick Benoit, Manager, Housing Services, Experient, says. “That’s why a tiered process is especially important in this strategy. Rather than a $200 room immediately becoming a $500 room, you can taper and layer the rooms into the block.”

“Those smaller cost adjustments are an easier pill for attendees to swallow,” Benoit adds.

A Strategy To Fuel Success In The Future

With limited new hotel construction and a forecast for more business travel, rate yielding is a term that will start to pop up in more conversations around the industry.

“It’s on the cutting edge,” Benoit says. “It’s going to be a very effective strategy to use in the next few years when rates are really high.”

Voorhees and Benoit both highlight that rate yielding may not be the right move for every meeting, but it can certainly pay dividends for many groups in desperate need of more rooms. 


GroupRevMax is considering variable pricing as a feature to it's group revenue management functionality and wants your feedback. What do you think? Would you like this feature for your hotel? Let us know your comments below.



Republished from: http://www.pcma.org/news/news-landing/2015/05/18/a-win-win-strategy-for-your-hotel-room-block-negotiations#.VZ7_HPlVikp#ixzz3fRGCwimj

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TravelClick predicts 3.5% increase in Group ADR. Will your hotel capitalize on this?

TravelClick predicts 3.5% increase in Group ADR. Will your hotel capitalize on this?


TravelClick’s NAHR predicts that group ADR is poised to go up 3.5% due to strong pace in third quarter of 2105. Further, group occupancy for the next 12 months is predicted to go up by 1.9%. That’s the average, but some hotels will benefit more and some less. Here’s a few questions to ask yourself to see if you are positioning yourself well to benefit the most.


Are you accepting the right business?

As group demand increases in convention markets, hotels will have to weigh every group lead against future group and transient potential. For example, business that negatively impacts the ratio of guest room to meeting space availability for future sales should be scrutinized more since the revenue potential of meeting space reduces when there aren’t enough guest rooms to match and vice versa. Another factor is overall profitability of the group across guest rooms, F&B, room rental and other ancillary revenue. Evaluating each group on these aspects will help identify good and bad business, but it has to be done in an automated way so you don’t impact speed to market.


Is your group pricing dynamic enough to capitalize on new demand?

Many hotels use a strategy known as MAR (Minimum Acceptable Rate) for pricing groups. MAR is generally derived from transient rates with a discount percentage, so the logic is that since we do good revenue management for transient rooms, it will flow into groups as well. However, groups are not the same as transient and a few factors when not considered can result in significant reduction of revenue and profit. 


Revenue leaks

Groups have many requests from hotels like complimentary rooms, upgrades, staff rooms, etc. In addition some groups come from commissionable channels and some are direct. Pricing everyone the same or can result in up to 15% loss of profit. 


Group Size 

Every sales manager loves a large group that fills up rooms, but from a revenue perspective smaller groups give revenue managers the opportunity to incrementally increase rates. In order to maximize revenue, hotels must consider loss of the opportunity to incrementally increase rates for larger groups after every so many rooms. The following chart shows the difference between price increase of $5 every 10 rooms and MAR pricing for a 300 room block.




Are you maximizing total revenue or focusing on guest rooms only?


The focus on ADR in TravelClick’s report is representative of the minimal focus that other revenue areas like meeting space and catering receive in most hotels. Hotels that enforce revenue and profit goals for conference space and catering are much better positioned to take full advantage of the improved pace to add to their bottom lines.
In addition, hotels can also adopt revenue management principles and variable pricing for conference space. As an example, if guest rooms are sold out, meeting space revenue goals could be reduced to enable them to be sold to catering only events. Also, as you get closer to the date, hotels could further reduce F&B minimum and rental to bring in any revenue that’s possible as long as it’s above cost. All this can be done manually, but is cumbersome and an automated pricing tool for conference space will sever hotels well. 


Is your speed to market good enough?


As markets get more compressed, meeting planners want to make sure they don’t lose good deals by waiting for every quote to come in and tend to finalize the first quote that meets their budget and other criteria. Hotels need to look at every aspect of their group sales cycle to see how speed to market can be optimized without sacrificing due diligence. The factors discussed in sections above should also be implemented so as to not impact speed to market.


How to fill the gaps?


So, you found some aspects that could be improved, so how do you do it? One solution in the market that can dramatically improve your speed to market while considering all the above factors is GroupRevMax. It’s cloud based and can be implemented in a few days to better position your hotel to take advantage of the group occupancy and ADR growth.  Visit their website at www.grouprevmax.com to learn more and set up a free demo.


Original article with TravelClick forecast can be found at http://www.hospitalitynet.org/performance/us/147000409/4070765.html


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